Life Insurance and Life Settlement Terms - A
Absolute Assignment
An irrevocable transfer of entire ownership of a life insurance policy or an annuity from one party to another. Contrast with coincident assignment.
Accelerated Death Benefit
Life insurance proceeds paid to a terminally ill person prior to his or her death. Generally, the life expectancy must be 6 to 12 months and the policy owner may receive 25-75% of the policy's face value. Any remainder is paid to the beneficiary after the insured's death.
Accidental Death Benefit (ADB) Rider
A ancillary term life insurance policy benefit rider that gives for an amount of money in addition to the basic death benefit of a term life insurance policy. This additional sum is payable only if the insured dies as the result of an accident.
Accidental Result Provision
A term life insurance policy accidental death benefit provision which states that an accidental death benefit will be paid if the insured’s death was the result, unswervingly and independently of all other causes, of accidental bodily injury.
Accelerative Endowment
A choice to use Life Insurance policy dividends to mature a policy as an endowment prior to the regular maturity date.
Accident and Health Insurance
Coverage for accidental hurts, accidental death, and allied health expenses. Benefits will make payment for preventative services, medical expenses and catastrophic care, with limits.
Accidental Death and Dismemberment (AD&D) Benefit
A supplementary life insurance policy benefit that gives for an sum of money in addition to the policy’s fundamental death benefit. This additional amount is payable if the insured expires as the result of an accident or if the insured loses any two limbs or the sight in both eyes as the result of an accident.
Account Receivables
Amounts owed to a business for commodities or services provided.
Accumulation at Interest Dividend Option
A choice, available to the owners of participating insurance policies, that lets a policy owner to leave policy dividends on deposit with the insurer and make interest.
Actuarial Department
The department in a life and health insurance company accountable for seeing that the company’s operations are conducted on a mathematically sound basis.
Actuary
An insurance professional skilled in the analysis, estimation and management of statistical information. Evaluates insurance firms’ reserves, determines rates and rating methods, and finds other business and financial risks.
Actual Cash Value
A type of insurance that pays damages equal to the replacement value of damaged property minus depreciation.
Additional Term Insurance Dividend Option
A term life insurance policy dividend option under which policy dividends are used as a net single premium to buy one-year term insurance.
Additional Living Expense
Extra charges covered by house owner’s policies over and above the policyholder are customary living expenses. They kick in when the insured requires temporary shelter due to damage by a covered peril that makes the home provisionally uninhabitable.
Adjustable Life Insurance
A type of life insurance that lets policy owners to vary the type of coverage provided by their policies as their insurance needs change.
Additional Term Insurance Option
A choice available to owners of participating insurance policies under which the insurer uses a policy dividend as a net single premium to buy one-year term insurance on the insured’s life. This is also called as fifth dividend option.
Adjuster
An individual employed by an assets/casualty insurer to evaluate losses and settle policyholder claims.
Admitted assets
Assets recognized and accepted by state insurance laws in ascertaining the solvency of insurers and reinsurers.
Admitted Company
An insurance concern licensed and authorized to do business in a meticulous state.
Adverse Selection
The tendency of those exposed to a greater risk to get more insurance coverage than those at a lower risk. Insurers react either by imposing higher premiums or not insuring at all, as in the case of floods.
Affinity sales
Selling insurance through groups like professional and business associations.
Agent
A party who is endorsed by another party, the principal, to act on the principal’s behalf in contractual transactions with third parties.
Agent’s Statement
The part of the insurance application in which the agent reports anything he or she knows or suspects regarding the proposed insured that is not reported by the applicant or proposed insured.
Age Change
The date on which a person's age, for insurance purposes, changes. In the majority of the Life Insurance contracts this is the date midway among the insured's natural birth dates. On the date of age change, a person's age might change to that of the last birth date, the nearer birth date, or the next birth date, depending upon the way in which the rating structure has been established by that meticulous insurer.
Agency Company
Concerns that market and sell products via independent agents.
Aleatory contract
A contract in which one party gives something of value to another party in exchange for a conditional promise, which is a promise that the other party will carry out a stated act upon the occurrence of an uncertain event. Insurance contracts are Aleatory as the policyowner pays premiums to the insurer, and in return the insurer promises to pay benefits if the event insured against happens.
Alien Insurance Company
An insurance concern incorporated under the laws of a foreign country, as opposed to a “foreign” insurance company which does business in states outside its own.
Allied Lines
Property insurance that is normally bought in conjunction with fire insurance; it comprises wind, water damage and vandalism coverage.
Alternative dispute Resolution (ADR)
An alternative to going to court to settle quarrels. Methods comprise arbitration, where disputing parties concur to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement among the two sides.
Alternative Markets
Nontraditional mechanisms used to finance jeopardy. This comprises captives, which are insurers owned by one or more non-insurers to give owners with coverage. Risk-retention groups, formed by members of alike professions or businesses to get liability insurance and self-insurance, are also included.
American Council of Life Insurance
In the United States, an organization which accumulates and disseminates data on life insurance markets.
Anniversary
The anniversary of the date on which a policy was given.
Annual Annuity contract Fee
Covers the cost of managing an annuity contract.
Annual Statement
synopsis of an insurer’s or reinsurer’s financial operations for a particular year, including a balance sheet. It is filed with the state insurance department of every jurisdiction in which the concern is licensed to conduct business.
Annuitant
The person who gets the income from an annuity contract. Normally the possessor of the contract or his or her spouse.
Annuitization
The conversion of the account balance of a delayed annuity contract to income payments.
Annuity
A life insurance product that pays periodic income benefits for a precise period of time or over the course of the annuitant’s life span. There are two basic types of annuities: deferred and immediate. Deferred annuities permit assets to grow tax-deferred eventually prior to being converted to payments to the annuitant. Immediate annuities let payments to start within about a year of purchase.
Annuity accumulation Phase or Period
The tenure during which the owner of a deferred annuity pays to build up assets.
Annuity Administrative charges
Covers the cost of consumer services for owners of variable annuities.
Annuity Beneficiary
In certain kinds of annuities, a person who gets annuity contract payments if the annuity owner or annuitant expires while payments are still due.
Annuity Certain
A kind of annuity contract that makes payment for periodic income benefits for a stated period of time, regardless of whether the annuitant lives or dies. Also called period certain annuity.
Annuity Contract
An agreement alike to an insurance policy for other insurance products like auto insurance.
Annuity Contract Owner
The person or entity that buys an annuity and has complete rights to the contract. Usually, but not always, the annuitant.
Annuity Cost
A monetary amount that is equal to the current value of future periodic income payments under an annuity.
Annuity Date
The date on which an insurer starts or is scheduled to begin making annuity benefit payments under an annuity contract. Also known as maturity date and annuity date.
Annuity Death Benefits
The guarantee that if an annuity contract owner expires before annuitization the beneficiary will get the value of the annuity that is due.
Annuity Insurance Charges
Covers managerial and mortality and expense risk costs.
Annuity Investment Management Fee
The fee paid for the management of variable annuity invested chattels.
Annuity Issuer
The insurance concern that issues the annuity.
Annuity Prospectus
Legal document giving detailed information about variable annuity contracts. Must be offered to each and every prospective purchaser.
Annuity Purchase Rate
The cost of an annuity based on such aspects as the age and gender of the contract owner.
Antiselection
The propensity of individuals who suspect or know they are more likely than average to experience loss to apply for or renew insurance to a better extent than people who lack such knowledge of possible loss. This is also called adverse selection and selection against the company.
Antitrust Laws
Laws that prohibit concerns from working as a group to fix prices restrict supplies or prevent competition in the marketplace. The insurance industry is subject to state antitrust laws however a restricted exemption from federal antitrust laws has.
Annually Renewable Term Insurance
Term life insurance that provides the policyowner the right to renew the coverage at the end of every year. This renewal right continues for a particular number of years or until the insured reaches the age specified in the contract.
Antiselection
The tendency of populace who believe they have a greater-than-average likelihood of loss to apply for or carry on insurance to a greater extent than do other people.
Applicant
The person applying for a term life insurance policy.
Application
A form that ought to be completed by an individual or other party who is seeking term life insurance coverage. This form gives the insurance company with much of the information it will require to decide whether to accept or reject the risk.
Approval Type Temporary Insurance Agreement
An agreement given in conjunction with a conditional premium receipt that offers temporary term life insurance coverage as of the date the insurer approves the proposed insured as a typical risk.
Attending Physician’s Statement (APS)
A written statement from a physician who has treated, or is presently treating, a proposed insured or an insured for one or more situations. The statement gives the insurance concern with information pertinent to underwriting a risk or settling a claim.
Apportionment
The dividing of a loss proportionately amid two or more insurers that cover the same loss.
Appraisal
A survey to find a property’s insurable value, or the sum of a loss.
Arbitration
Procedure in which an insurance concern and the insured or a vendor concur to settle a claim dispute by accepting a decision made by a third party.
Arson
The purposeful setting of a fire.
Assignor
The proprietor of property who transfers certain rights in that property to another party by means of a complete or collateral assignment.
Asset-Backed Securities
Bonds that stand for pools of loans of similar types, duration and interest tariffs/rates. Almost any loan with regular reimbursement of principal and interest may be securitized, from auto loans and equipment leases to credit card receivables and mortgages.
Assets
Property possessed, in this case by an insurance concern, including stocks, bonds and real estate. Insurance accounting is concerned with solvency and the capacity to pay claims. State insurance laws thus needs a conservative valuation of assets, prohibiting insurance companies from listing assets on their balance sheets whose values are uncertain, like furniture, fixtures, debit balances and accounts receivable that are more than 90 days past due.
Assigned Risk Plans
Facilities through which drivers can get auto insurance if they are not able to purchase it in the regular or voluntary market. These are the most renowned type of residual auto insurance market, which exist in each and every state.
Assignment
An agreement under which one party—the assignor—transfers few or all of his ownership rights in a meticulous property, like a life insurance policy or an annuity contract, to another party—the assignee.
Association group
A kind of group that generally is eligible for group insurance and that has members of an association of individuals formed for a reason other than to obtain insurance coverage, like teachers’ associations and physicians’ associations.
Attained Age
The present age of an insured.
Attained age Conversion
The conversion of a life insurance policy from one type of insurance to another at a premium rate that is based on the age of the insured individual at the time of the conversion.
Attending Physicians Statement
A written declaration from a physician who has treated, or is presently treating, a proposed insured or an insured for one or more conditions. The statement gives the insurance concern with information pertinent to underwriting a risk or settling a claim.
Automatic Dividend Option
For a meticulous life insurance policy, the dividend choice that applies if the policyowner does not opt an option. The most frequent automatic dividend option is the paid-up additional insurance dividend option.
Automatic Nonforfeiture Option
For a meticulous life insurance policy, a specified nonforfeiture benefit that becomes effectual automatically when a renewal premium is not paid by the end of the grace period and the policyowner has not elected another nonforfeiture choice. The most frequent automatic nonforfeiture option is the extended term insurance option.
Auto Insurance Policy
Auto insurance covers you from losses incurred on the subject of automobile usage and protects your financial security in the event of an accident. Coverage will guard you regarding liability in the event of bodily injury, property damage, and medical payments, and also physical damage coverages of collision and complete. The insurance company will concur to pay for losses decided on in your policy in exchange for your premium sum.
Auto Insurance Premium
The rate/cost an insurance company charges for coverage, based on the frequency and cost of possible accidents, theft and other losses. Prices differ from company to company, as with any commodity or service.
Automatic Premium Loan
A life insurance policy provision that permits the insurer to pay an overdue premium on a policy by taking a loan against the policy’s cash value.
Aviation Exclusion
A life insurance contract provision which states that the death gain is not owed if the insured expires as of certain aviation activities.
Aviation Insurance
Commercial airlines hold property insurance on airliners and liability insurance for neglectful acts that lead to injury or property damage to passengers or others. The policy restrictions the geographical area and individual pilots covered.
